Navigating the Economic Landscape

Archive for April, 2011

As we go about our lives this weekend, let us pause and remember the hundreds of thousands of our fellow citizens whose lives have been severely disrupted by the horrific tornadoes that ran through the southeast on Wednesday night. Let us pray for all those who have lost loved ones. Let us pray for all those who have lost their homes and their sense of security as evidenced by this string of chilling photos in The Birmingham News.

Earlier this month I inquired Did Wall Street Violate the Racketeering Act? in regard to the rampant abuses centered on Wall Street institutions involved in the mortgage foreclosure travesty. That commentary written on April 4th generated the strongest and most vocal reaction to any commentary I have written since the inception of Sense on Cents in January 2009. (I encourage you to scan the comments to that article to gain a sense of the pain and anguish felt by so many in our nation today!)

Today I repeat the question.

“Did Wall Street Violate the Racketeering Act …Again??” in regard to the pricing and potential manipulation of the credit derivatives market? Why has Wall Street fought the legislative and regulatory proposals to bring greater transparency into this corner of the casino? Why does Wall Street want to maintain its hegemony over the cash cow known as ‘credit derivatives’? Let’s navigate across the pond and review a probe of Wall Street’s CDS business by the EU. The European Union put out this official press release this morning: (more…)

In recent days, the nation’s top two economic policy makers—Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner—have publicly expressed their desire for a strong dollar. But there is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency’s downward course.

When thinking of Bernanke and Geithner, who do you think of first, Abbott and Costello or Laurel and Hardy? I am more in the former camp. “Hey, Abbbbbotttttt!!” (more…)

Increases in the prices of energy and other commodities have pushed up inflation in recent months. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. (more…)

Tomorrow may be a truly special day in the history of our country’s financial hierarchy. The normally secretive institution known as the Federal Reserve led by current chair Ben Bernanke will host a live press conference shortly after the Fed Board of Governors exits from its regularly scheduled meeting addressing our nation’s economy and the Fed’s current monetary policy.

Will Bernanke surprise the markets and announce a continuation of the Fed’s asset bubbling, commodity inflating policy known formally as quantitative easing? Did somebody in the markets today know something about the Fed’s stance? Did anybody else find it particularly interesting that both stocks and bonds rallied big today?

While market participants anxiously await Bernanke’s words of wisdom, I actually think the better “Fed-show” may have been delivered today by Robert Auerbach. Who is Robert Auerbach? (more…)

1. Shoddy underwriting standards for borrowers.
2. A massively flawed system promoted and perpetuated by the Wall Street securitization business.
3. Borrowers overleveraged leading to skyrocketing rates of foreclosures and defaults.
4. A mentality that housing finance could promote a real social benefit and a profitable enterprise.
5. A government backstop and ultimate bailout for investors.
6. An ultimate fiasco for our society as a whole.

Have we learned our lessons from the sub-prime housing nightmare? Could we possibly be going down the same path in another segment of our economy? Yesterday a reader inquired if I had addressed the potential impending fiasco in student loans. This morning I discussed the cost of higher education with my better half. Will our economy be able to generate both the jobs and income levels for students to manage their increasing levels of indebtedness? (more…)

Try telling that to an individual ravaged by an investment scam, sold out by financial regulators, abused by her bank, and left paying substantially more at the gas pump and checkout line.

If these travesties were not bad enough, how do you think this individual may feel about the lack of real justice meted out against those individuals and organizations which perpetrated obvious scams and abuses? How do you think this individual may vote in upcoming elections? (more…)

There will be time to continue navigating the economic landscape but this weekend is a time for family, friends, and faith. In fact, wouldn’t it be great if we could always keep our proper focus and perspective when it comes to our family, our friends, and our faith? The world would be a better place if we could.

I hope for today and this weekend you have the opportunity to be with loved ones. In doing so, for those who share my faith let us reconfirm the greatest of all our beliefs,

For our sake he was crucified
under Pontius Pilate;
he suffered died and was buried.
On the third day he rose again,
in fulfillment of the Scriptures;
He ascended into heaven
and is seated at the right hand of the Father.
He will come again to judge
the living and the dead.

For those of other faiths, I wish for you real peace today and everyday.

For those who can not be with family, please let me share this beautiful Irish blessing with a melodious accompaniment so God will watch over you and all of us.

After visiting with my fabulous Uncle Charles a few years back and prior to his passing in early 2010, I encouraged him to “keep the faith.” He responded, “no, Larry, no, do not merely keep the faith, spread the faith.”

Here’s to you, Charlie!!

Additionally, Charlie, if you get a chance please put in the good word for us!! A couple of the Doyle boys might need a little extra help getting through purgatory!!

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

A few years back when I had just launched Sense on Cents, I would host formal weekly exchanges with readers. This forum, entitled Sense on Cents Central Station, allowed readers an opportunity to ask questions, make comments, or shout from the mountaintop (how many currently feel like saying, “I’m pissed and I’m not going to take it anymore!!” More than a few I’ll bet.). Are there specific financial or economic topics you would like me to address now? Ask away.

Given all that is going on in our world and in each and every large city and small community within our own country, I firmly believe people want a voice and to know that somebody is listening. You have it right here. What is on your mind? Speak out. Inquire. Do not be bashful. Are there questions you have as you navigate your own personal economic landscape that I might be able to address? Collectively we can help each other.

Today’s commentary is a little lengthy but is very personal. I hope you will take the few extra minutes to read it and share it with friends, family, and colleagues. Thanks. LD

Each and every day I think of what I can write that will truly help people further understand the dynamics at work in our global economy. In the course of my writing I am often drawn to specifically help those who have been defrauded or abused by the system that operates on Wall Street and in Washington.

I derive tremendous personal satisfaction in providing an outlet and a sympathetic ear to those who feel that few if any people are in their corner. No group of investors and individuals deserves greater sympathy and a stronger voice than our fellow American citizens so badly mistreated in the entanglement of auction-rate securities.

While many within our nation and the markets today may care to focus on recent earnings reports, a rebounding equity market, or the upcoming long weekend, let us remember that there are thousands in this country who still experience real pain from the ARS scandal. Is it easier to forget about them? If you care.

I choose to reach out to them again and spread their stories of real pain and anguish. Why? (more…)